The Australian dollar opened sharply higher today compared to the Friday’s close and continued to move up versus most major currencies afterwards. While domestic macroeconomic data was not particularly good, the currency paid more attention to extremely positive reports in China, Australia’s biggest trading partner.
China’s official manufacturing Purchasing Managers’ Index climbed to 50.5 in March from 49.2 in February, reaching the highest level in six months, versus market expectations of a small increase to just 49.6. It was the biggest monthly increase since 2012. The non-manufacturing PMI rose to 54.8 from 54.3 compared to the average forecast of 54.5. The Caixin China Manufacturing PMI climbed to 50.8 from 49.9, reaching the highest level since July.
As for reports in Australia, the Australian Industry Group Australian Performance of Manufacturing Index dropped to 51.0 in March from 54.0 in February, seasonally adjusted. The National Australia Bank business confidence index declined from +2 to 0 in March. At the same time, the business conditions index rose from +4 to +7.
AUD/USD opened at 0.7116 today after closing at 0.7094 on Friday and rose to 0.7127 by 9:07 GMT. EUR/AUD traded at 1.5772 after closing at 1.5805 on Friday and opening at 1.5764 today. AUD/JPY closed at 78.63 at the previous trading session, opened at 79.01 at the current session, and rose to 79.12 by now.
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